Israelis go to the polls today in an election that could have a devastating impact on hopes for a future peace deal with the Palestinians.

While Prime Minister Benjamin Netanyahu is predicted to win the most seats, opinion polls have suggested support for his Likud Beitenu party has been steadily eroded by a surge in the popularity of smaller right wing parties.

Analysts have observed that a weak performance by his party at the ballot box could leave Mr Netanyahu having to accept demands from more extremist groups in order to form a coalition government.

Last Friday the publication of the final opinion polls before the vote showed the overall bloc of Israel's right-wing and religious parties winning a slim parliamentary majority of 63 out of 120 seats.

In the course of the campaign, the man who has generated more headlines than any other is Naftali Bennett - leader of the hard-line Jewish Home party.

The party has surged in the polls. Six months ago they were predicted to win just two seats. Now they are expected to win as many as 15.

Running on a platform of outright refusal to countenance land deals with the Palestinians or the creation of a Palestinian state, the growing strength of Jewish Home is indicative of a general shift to the right among the Israeli electorate.

If the polls are right Mr Bennett is likely to end up being given a senior role in Mr Netanyahu's next cabinet.

Mr Bennett, who once served as Chief of Staff to Mr Netanyahu, is a multi-millionaire businessman and a former major in the Israeli army.

Naftali Bennett heads the Jewish Home party

He also led the main organisation representing Jewish settlers in the built-up West Bank outposts, which have been deemed illegal under international law.

Speaking to Sky's Middle East Correspondent Sam Kiley in Jerusalem, Mr Bennett explained why he would rather opt for continuation of the Israeli occupation of the Palestinian Territories than discuss a peace deal.

He said, "Establishing a Palestinian State within the land of Israel would spell eternal war, bloodshed and sorrow between us and our neighbours.

"We've had it in Gaza and look what happened - we handed over 100% of the land to the Arabs and days after they started shooting thousands of rockets at us.”

In recent years these kinds of arguments were the preserve of the hard-line minority, but the fact Mr Bennett has emerged as a potential king-maker in the election suggests such views are becoming increasingly mainstream.

Such negative attitudes towards the potential for a renewal of peace talks between the two parties have a become a major concern for many western diplomats, including those from Britain, as well as more left wing candidates in Israel.

Yaakov Peri, a former head of Israel's internal intelligence agency the Shin Bet, is standing as a candidate for the Yesh Atid - a centre-left party led by a well-known former television journalist.

He told Sky News the shift to the right, and the absence of any unity among the left wing and centrist bloc spelt trouble for the future stability of the region.

"I think it's a disaster. It's a disaster from all aspects you can imagine," he said.

Officials in the Palestinian Authority will also be watching the results carefully.

In anonymous briefings there have already been suggestions that the election of a right-wing government will prompt an attempt by the Palestinians to use their new UN non-observer status to push claims of Israeli war crimes at the International Criminal Court.